1/25 Gold Coins

Like you, I personally would prefer to just buy a full ounce coin to avoid paying all that premium.

The allure of these and other fraction-of-an-ounce bullion coins is this:
Spending smaller amounts at a time is a lot easier to do to obtain gold for most average people. Coming up with $1,200+ dollars at a time to purchase a full ounce is not easy to do for the vast majority of people. Although you do end up paying hefty premiums over spot for these coins, they also sell for a premium.

Having sold bullion coins (particularly 1/10 oz AGE's), I also know that these smaller coins tend to sell faster for the same reason outlined above. The first time I sold bullion, I was amazed at how fast I was able to liquidate it.

People aren't necessarily buying these as an 'investment' in gold; if so, most would buy a relatively more affordable fractional gold bullion coin (i.e. 1/20oz, 1/10oz gold maple). People buy these for their numismatic value, reduced mintage, design, and generally high resale value in the secondary market.

As with any coin/bullion, the premium will become larger as the weight of the coin becomes smaller; the premium on these coins is to be expected. If you don't care for it, stick with fractional gold bullion coins that carry a smaller premium above spot.